Access to affordable finance is one of the most discussed and least solved challenges in the small business sector. Despite years of government attention and a proliferation of fintech lenders, many small businesses still find it difficult to access working capital and growth finance on terms that make commercial sense.
Bank Lending Remains Constrained
Major bank lending to small and medium businesses has grown more slowly than overall business credit, with lenders citing concentration risk and the administrative costs of small loan origination as key factors. The Reserve Bank of Australia’s Financial Stability Review consistently notes the disproportionate reliance of small businesses on personal assets as collateral for business lending.
The Rise of Alternative Finance
Invoice financing, equipment leasing, revenue-based financing and peer-to-peer lending platforms have grown substantially. ASIC’s regulatory frameworks have enabled a new generation of lenders, though interest rates from alternative providers remain significantly higher than bank rates.
Government Guarantee Schemes
Government-backed lending initiatives have provided some improvement in access. Current programs are summarised on the business.gov.au grants and finance finder tool.
SBTC’s Position
SBTC has called on the government to expand the scope of the Small Business Loan Guarantee program and to work with lenders to develop unsecured lending products that do not require residential property as collateral. We will continue to advocate for data-driven reforms that improve capital access for the sector.
